Tory seeks to cut 'inefficiency marbled throughout government' – good luck with that

For Rob Ford, being mayor was about stopping the flow of gravy. For John Tory, it’s apparently about cutting out the fatty beef.

At least I think that’s what the mayor was implying in his 2016 budget guidance letter, released yesterday as part of the agenda for the next meeting of city hall’s budget committee.

In it, Tory calls for all city departments to reduce their budgets by two per cent, suggesting that they do so by working to “eliminate the inefficiency marbled throughout government.”

Yeah, marbled. Like fat in a steak, I guess. I don’t know — I’m not much of a foodie. It would be nice if Toronto mayors would stop explaining their fiscal priorities with culinary analogies.

Anyway, Tory’s budget guidance letter is further indication that Tory is going to stand tough with his demand that all city departments cut their budgets by two per cent next year. He also calls once again for a property tax increase at or below the rate of inflation and for unspecified investments in transit to reduce congestion and gridlock.

Achieving all three is going to be hard.

Let’s start with the idea of finding efficiencies. Two per cent doesn’t seem like much, sure, but remember that Toronto’s gross operating budget totalled $9.94 billion in 2015. Some rough math tells us that cutting that figure down by two per cent would mean finding about $198 million in permanent savings.

Sure, there was a time when finding that much would have been possible, but the city’s finances look a whole lot different now. After years of finding budget efficiencies under mayor David Miller, a partially-achieved 10 per cent departmental budget cut under Ford in 2012 and assorted other savings, former city manager Joe Pennachetti declared that there weren’t many more efficiencies to be found at city hall.

I guess Tory plans to test that assertion.

Also likely to prove tricky is holding property taxes at or below the rate of inflation. I’m not a fan of this policy, as I’ve written before, mostly because the city is facing increased costs due to population growth and a repair backlog for infrastructure and housing. Inflationary property tax increases won’t address those problems.

But even ignoring that, there's another problem: the big looming budget hole.

The city’s budget projections for 2016 forecast a $415 million budget gap that will need to be balanced through savings, fee/fare increases or taxes. Even after working in Tory’s efficiency target, an inflationary residential property tax increase of about two per cent — raising roughly $50 million — isn’t going to be enough to cover the difference.

Which brings us to Tory’s other major priority: investing in transit service. This doesn’t square with the rest of his goals. It’s hard to cut budgets and revenues while also increasing service. It’s a bit like me saying I plan to quit my job and sacrifice most of my income, but also buy myself a kick-ass yacht.

But none of this is to say Tory’s budget goals as laid out in his guidance letter are impossible. As we saw this year with the city’s weird strategy to loan money to itself, there are always strategies staff can use to help politicians keep their promises.

The city could raid its reserve funds. Or increase the amount of staff gapping. Or adjust service standards. Or make up some of the budget hole through TTC fare increases. Or jack up user fees some more. Or find yet another way to kick problems like TTC accessibility and TCHC repairs down the road another year or two.

Or cut services.

But for me, none of those are preferable to responsible budgeting. Perhaps Mayor Tory should try that.